Thursday, September 29, 2016

IRS REPORT: Bruh, Joe the Plumber Was Right; Obamacare Just Spread $11 Billion of Wealth Around

If folks don't like their healthcare then they can give us all their money so we can give it to other folks.

New IRS disclosures from the 2014 tax year reveal the specifics of how the so-called "Affordable Care Act" helped to facilitate Obama's desire to, as he famously told "Joe the Plumber", "spread the wealth around." To be precise, in 2014, Obamacare spread $11.2BN of wealth around, in the form of healthcare premium tax credits, with nearly 80% going to taxpayers reporting less that $35,000 of adjusted gross income. Moreover, the average tax filer received $3,600 of healthcare premium support with those in the lowest tax bracket receiving over $5,500 per person.

Equally disturbing is this fact:

8.1mm tax filers, those who elected to forgo health insurance, were hit with $1.7BN in Obamacare penalties...call it the "young and healthy tax". Ironically, 40% of the penalties fell upon people making less than $35,000 per year...the very same people that Obama apparently intended to "help".

Here's how the subsidies and penalties broke down by tax bracket (the original IRS table can be found here):

Of course, the real tragedy of Obamacare is that even if those 8.1mm young and healthy people wanted to buy health insurance, many of them have now likely been priced out of the market as premiums have soared and coverage "options" have vanished as insurers have pulled out of exchanges all over the country (something we discussed at length in a post entitled "Obamacare On "Verge Of Collapse" As Premiums Set To Soar Again In 2017"). In essence, while the bill has seemingly "helped" the 3.1mm people receiving subsidies in the chart above it has trapped the 8.1mm young and health people with a permanent tax increase as they are now even less likely to buy health insurance after Obamacare has driven up the rates astronomically.

But, of course, the Obamacare penalties will only get even worse from here. According to The Washington Free Beacon, in 2014, uninsured individuals were required to pay the greater of either a flat penalty of $95 for each uninsured adult or 1% of their household’s adjusted gross income. That said, the penalties are set to increase in 2016 to the greater of a flat fee of $695 or 2.5% of AGI. According to the Congressional Budget Office, taxpayers are expected to pay penalties of $4BN in 2016 and $5BN annually from 2017 through 2024.

Senator Tom Cotton (R-Arkansas), also pointed out the irony in the fact that Obamacare is now penalizing many taxpayers who can no longer afford healthcare simply because Obamacare itself has driven up premiums to such an extent they've been rendered completely unaffordable.

“It’s not surprising that the Obamacare mandate numbers are worse than the administration first claimed,” said Sen. Tom Cotton (R., Ark.). “Obamacare penalizes taxpayers who can no longer afford insurance that Obamacare made unaffordable...”

...“As Obamacare continues to unravel, things will only get worse,” Cotton said. “The legacy of Obamacare is skyrocketing premiums, unaffordable deductibles, the destruction of the individual insurance market, and tax penalties on Obamacare’s victims.”

5 comments:

There's another tax consequence of Obamacare. For people who PAY taxes AND have high medical expenses, they raised the threshold one has to meet before they can deduct those expenses. It used to be you could deduct everything over 7% of income. They raised it to a 10% hurdle.

In short, they penalize those with the highest health care burden. And---predictably---no one in the media or anywhere else noticed. Except me....because I have those high expenses.